The Proximal Tubule

President Bush has been willing to discuss Social Security reform, at least conceptually. He would allow younger workers to privately invest a portion of their Social Security taxes through individual accounts. But, so far he has been unwilling to put any political capital behind such proposals. And, he has been maddeningly short of details on issues such as how big private accounts should be, or how he would finance short-term cash shortfalls during the transition to individual accounts.

Bush's Democratic opponent, Sen. John Kerry, has so far defined his position primarily by what he is against. Campaigning in Florida, Kerry told a group of seniors, "I will never privatize Social Security. Never, never, never!" Kerry went on to say that he would never support any cuts in Social Security benefits either. "Not me. Not my party. Not ever." That's all very well-but then what is he for? As former President Bill Clinton pointed out, there are only three options for Social Security reform: raise taxes, cut benefits, or invest privately. Kerry seems to be taking benefit cuts and private investment off the table. Does that mean he supports tax increases? If so, he isn't saying.

The danger, of course, is that people will believe the stereotypes of their political opposites, because they don't actually know anyone on the opposite side of the red-blue divide. Why do both families see their political opposites as people who complain all the time, who are (my words) essentially anti-American? They aren't thinking of neighbors or family members they disagree with. They're thinking of the voices they hear on TV and radio, where conflict and explosive, extreme statements sell.

The case against fat proceeds on the assumption that if a fat person becomes thin, that person will acquire the health characteristics of people who were thin in the first place. Although this assumption may seem like simple common sense, it is, like many commonsensical assumptions, quite dubious. If a person who is physiologically inclined to be fat loses weight, this does not transform that person into someone who is physiologically inclined to be thin.

• Tyler Cowen comments on a study that looks at the productivity of the US health care system compared to Uk and German systems with respect to individual diseases. Go to trackback to see several other bloggers comment.
• Arnold Kling's rect TCS column discussing paternalism in governemental policy. He also has this interesting post on the welfare state and this link to a history of marijuana prohibition.
• Over at the VC, Stuart Benjamin finds the good in the recent actions by the FCC and David Bernstein comments on speech restrictions in Canada.
• Glen at Agoraphilia discusses the trade-offs of style in writing. Check out this great site for commentary on economics and linguistics (Stephanie Berrong, I'm looking at you).
• Catallarchy and gay marriage, the Columbine shootings, and the war on gambling.
• And finally let me recommend the great new blog Cafe Hayek. Read these recent posts on the injustice of taxi cab licensing in NYC, the recent call for reinstitution of the draft, the 20th Century's most dangerous idea, an unfortunate, yet predictable, consequence of prescriptiondrug reimportation from Canada, a celebration of Earth Day, free-market syle, a call for censorship by that great social philosopher, Pat Boone, and an outline of logical conclusions for opponents of free trade. I hate to link to half of their stuff, but they had a damn good week.
• Oh, and one more thing, the best news of the week, a call in the Louisiana state legislature to ban low-cut pants. Seriously.

A still better solution is the combination of either caveat emptor or caveat emptor with freedom of contract. Suppose the rule is caveat emptor, and further suppose that consumers would much prefer to buy under a rule of caveat venditor, even at a price that compensated the producers for the cost of that rule. In that case, producers will find that selling their product with a guarantee (at a higher price) is more profitable than selling it without a guarantee. The producer who offers a guarantee is converting the rule for his product into caveat venditor - voluntarily making himself liable for product defects.

Suppose instead that the rule is caveat venditor. The consumer could convert it to caveat emptor by signing a waiver agreeing not to sue. One area where such waivers could make a very large difference is medical malpractice. Given the high cost of malpractice insurance, a doctor might offer a much lower price to a patient who agreed to limitations on his ability to sue.

The Department of Agriculture refused yesterday to allow a Kansas beef producer to test all of its cattle for mad cow disease, saying such sweeping tests were not scientifically warranted.

The producer, Creekstone Farms Premium Beef, wanted to use recently approved rapid tests so it could resume selling its fat-marbled black Angus beef to Japan, which banned American beef after a cow slaughtered in Washington State last December tested positive for mad cow. The company has complained that the ban is costing it $40,000 a day and forced it to lay off 50 employees.

The department's under secretary for marketing and regulation, Bill Hawks, said in a statement yesterday that the rapid tests, which are used in Japan and Europe, were licensed for surveillance of animal health, while Creekstone's use would have "implied a consumer safety aspect that is not scientifically warranted."

Lobbying groups for cattle ranchers and slaughterhouses applauded the decision, but consumer advocates denounced it, saying the department was preventing Creekstone from taking extra steps to prove its product was safe.

Eugene Volokh looks at Ashcroft's War on Porn (because terrorists aren't really a threat after all), and here are his three likely scenarios:

The crackdown on porn is doomed to be utterly ineffective in its stated goals of preventing the supposedly harmful effects of porn on its viewers, and on the viewers' neighbors.

The crackdown on porn will be made effective -- by implementing a comprehensive government-mandated filtering system run by some administrative agency that constantly monitors the Net and requires private service providers to block any sites that the agency says are obscene.

The War on Smut will be made effective by prosecuting, imprisoning, and seizing the assets of porn buyers.

So...which one do you like? Personally I think Ashcroft wants number 3. After all, with this jackass it isn't just that the porn is out there, but that people are looking at it and liking it. In any event the bottom line is still the same: resources that could be used to reduce the threat of domestic terrorist attacks will be spent fighting....porn.

• Maddux: 6 IP, 4 H, 3 R, 2 BB, 3 K, 4.50 ERA
• Lee: 10 AB, 2 H, 2 R, 1 2B, 1 HR, 1 RBI, 1 BB
• Barrett: 8 AB, 3 H, 1 R, 1 2B, 1 3B, 1 RBI
• Cruz: 2.2 IP, 2 H, 1 R, 2 BB, 1 K
• Choi: 11 AB, 2 H, 1 R, 1 HR, 4 RBI, 1 BB
• Rodriguez: 18 AB, 2 R, 7 H, 2 2B, 1 HR, 3 RBI, 1 BB

I think he's nuts for lumping all these inefficiencies and piecemeal regulations together (many of which, like the 1996 Kennedy-Kassebaum bill, had to be created as a result of the best that free market health care has ever achieved---managed care) and equating it with nationalized health care. Anyone who has studied the single-payer model probably stopped reading halfway through because it was such an insult to the term "national health care."

In 1962 the Canadian province of Saskatchewan instituted national health care. There were lots of folks like Trent out there suggesting that it would die an early death. Five years later, when the other provinces saw how Saskatchewan was doing, they were all going to institute their own health plans. The result was the comprehensive national program that still enjoys broad nationwide support today.

So I'll gladly scoop up that gauntlet: Let's try out a single-payer system in one U.S. state. Give it a fair shot, and see what happens. I bet you'd see other states follow.

I wish I had more time to write, but instead I'll just devote a paragraph to stamping myself an incorrigible liberal. I was sad to see that nowhere in Trent's discussion was the fact that under a true national health care plan, all citizens of this country would have access to basic primary healthcare. 18,000 people die every year because they don't have health insurance (that's from a report by the Institute of Medicine). It may not factor into the dollars and cents, but it matters.

• Liberty Corner
• Idiot Villager #1 and #2
• Catallarchy
• Coffee With Rhoads
• and, Asymmetrical Information

I'm not sure "we," the hypothetical Trentian readers ("Yes, Socrates"), should be so quick to agree there. When I think nationalization, I think not only of who pays but also of who controls. For instance, suppose the government stopped providing public schooling (where it controls the curriculum) but paid for all private schooling through generous vouchers (where the private providers would control the curriculum). By Trent's definition, that's still a perfectly nationalized system, but voucher advocates would characterize that as a free-market alternative, since government curriculum would have dropped from 100% to 0%.

...in this new two-dimensional model (with control on one axis and funding on the other) you can't characterize it as Trent did, a la "How can you ask for more 'nationalization' when we're already so 'nationalized,' so presumptively 'nationalization' is the source of our problems?" -- a question that seems to rely on a loose understanding of "nationalization."

• The various FDA regulations mentioned previously. US citizens spend 12.4% of their health care dollar on pharmaceuticals, and 88% of that is funded privately, yielding ~11% from private expenditures. I could not find data estimating what percent of this went to cover regulatory compliance, but I can safely estimate it's enough to say that a few percent of total health care expenditures can be transferred from the private side to the public side.
• The relatively new HIPAA regulations. These have enforced new privacy laws that have placed a cost burden on health care. Hiring compliance personnel, changing infrastructure, etc. - these have all increased the prices we pay from our "private" stocks. It is difficult for me to estimate what these costs are due to the paucity of data from these relatively new laws. It is safe to assume they are not insignificant.
• CLIA. These regulations affect all lab tests performed by or for a physician. Laboratories rival pharmaceutical as the most heavily regulated sector of health care. Lab tests make up a significant portion of health care expenditures. Again, the burden is not insignificant.
• Private health insurance regulations. Private insurance premiums make up a large portion of total private expenditures, but they are not all "private." There are numerous regulations and laws that dictate certain things that private insurers have to cover that they may not otherwise. These increase premiums. But you have to count them as public expenditures for the same reasons as above, and I would guess (though am not sure) that these represent the largest number on this list.
• Physician licensure requirements. Med students, residents, and physicians have to undergo rigorous and expensive testing and review for licensure. These costs are passed along to consumers in fees and are not insignificant.
• Finally, all similar state regulations that work above and beyond federal regulations. This number may be insignificant.
• Oh yeah, I almost forgot, compulsory prescription requirements. This number may be small, but I have to bring it up, well, just because.

Always a profession of concrete thinkers, doctors have begun to realize that the term "fee-for-service" can be taken literally. A growing number have stopped working with insurance companies and started accepting cash payments only. An AP article on this phenomenon put the smiley shiney face of it up front:

Before, [the doctor] charged $79 for an office visit and got $43 from an insurance company months later, minus the $20 in staff time it took to collect the payment. Now he charges $50 - and he never worries about collection costs, because patients pay in full after every visit.

Later in the article, it seems to occur to the reporter that "a $50 charge can be powerful incentive to delay seeing a doctor until you're in pain - which can lead to more expensive health problems later."

Still, the proponents of cash-only medicine have finally hit on a powerful analogy to build support for their vision:

Cash crusaders acknowledge the need for some type of insurance. Without it, expensive surgery or hospitalization would force most people into bankruptcy. But they think health insurance should work more like car insurance: you pay for the routine maintenance and little dings yourself, and insurance pays for more expensive repairs.

It sounds nice. Unfortunately, this system is inherently regressive. A $50 visit is a much greater burden to someone making $19,000 a year than to someone making $250,000. If the entire country shifted to this model it would be like increasing taxes on the poor and decreasing them for the rich. And no presidential administration would ever tolerate that, especially while the country is in a recession.

...Everyone agrees that this is no solution to our healthcare crisis. But hey, if Rome is already burning, why not light a match?

Trent puts the burden of proof on those who support prescription protections. He insists they prove that these burdensome, restricting regulations save the lives of enough people to make them worthwhile. Well, there may not yet be a study out there to prove it, but that doesn't mean lives haven't been saved by prescriptions. To Trent, that's not enough. If there isn't proof that a regulation works, we need to get rid of it.

After hammering the prescription process for having no proveable benefit---in other words, there are no randomized controlled double-blind trials to indicate their effectiveness---he writes that there is only "intuitive evidence" that having prescriptions is harmful. The real harm, Trent says, is that they restrict our liberty.

You can't buy Coumadin without a prescription. You also can't buy thalidomide. Or plutonium. You can't buy meat filled with prions that will give you Crutzfeld-Jacob disease. Why? Because that intrusive, burdensome government has regulations; because that awful FDA won't allow vendors to sell meat that doesn't match certain standards. That's an infringement on our liberty too.

Our freedom is restricted in lots of ways: the freedom to buy infected foods, defective auto parts, malfunctioning chain saws. Our freedom to fly across the country inexpensively is restricted: if there weren't safety standards for airlines, you can bet there would be a bargain basement version of EasyJet offering super-cheap tickets (and a 1 in 20 chance of crashing).

All of that said, Trent makes a lot of good points and I kind of agree with him. A lot of medications that are currently prescription could be made over-the-counter. Trent makes an odd logical leap here, though. He says that because we have to divide drugs into two groups (prescription and OTC), the entire concept of prescriptions is invalid. Yes, we have to draw a line somewhere between Tylenol and Digoxin. Yes, it may be difficult to decide which drugs are prescription and which are OTC. Does that mean we shouldn't be willing to make the tough decisions? Life is filled with gray areas and tough calls. This is one of them.

Finally: As a big supporter of single-payer universal healthcare, my thoughts are constantly drawn back to questions of access. I might be able to agree with Trent about eliminating prescription protections, but only if I thought that every citizen with the desire to visit a doctor were able to. That's obviously not the case in America today. If all drugs were OTC, you'd see a lot of people wanting to visit a doctor for advice, but deciding against it for financial reasons. Glorfindel mentions the "short-term consequences" of getting rid of the prescription process. Without universal healthcare, those would become long-term structural consequences (not simple transaction costs, as Trent calls them), and those would be devastating.

What we need is a controlled trial. Let's take a reasonable-sized population (thousands, probably) and offer half of them unrestricted personal-use access to previously prescription drugs (excepting scheduled drugs, antibiotics, and antivirals). We monitor them for a year or two and measure morbidity and mortality.

If such a trial were conducted and it showed no significant difference would the people who are currently opposed to removing the prescription requirement now favor it? If not, why not?

Now, I don't expect that this experiment will actually be conducted--though I think it would be a good one--but that doesn't mean that we can't try to answer this question without it. Are there natural constituencies who have easier access to prescription drugs? Maybe people who live close to Mexico and can drive over the border? Has the existence of Internet pharmacies changed the situation at all? Obviously, an epidemiological study of this kind would be less convincing than a controlled trial, but it would be a good start.

What these radicals are doing is to create a straw man, under the guise of liberty, and then make these reckless statements and attack physicians' motives to serve their own narrow and selfish interests.